Household Preferences Research Articles

Risk attitudes and private disability insurance holdings

AbstractThis study identifies several factors that affect the demand for disability insurance (DI), such as wealth, health, financial literacy, and self-reported willingness to take financial risks, using a logit model and a random forest algorithm. While the role of risk aversion in insurance ownership is well established within theoretical insurance models, the empirical literature is still inconclusive. We provide evidence based on the Survey of Consumer Finances that willingness to take financial risks similar to wealth, health, and financial literacy is positively associated with the ownership of private DI. Furthermore, the literature has not explored multivariate risk attitudes in this framework. We thus employ indices of multivariate risk attitudes within a theoretical DI model. Our empirical results on private DI, in conjunction with the theoretical model we present, allow us to test hypotheses regarding multivariate household preferences and reject the hypothesis of correlation-neutral preferences on wealth and health.

Exploring Household Preferences for Visualising Consumption Information: Towards Data Physicalizations to Promote Sustainable Practices

Abstract This paper explores household preferences for visualizing consumption data and investigates the potential of data physicalizations to enhance user engagement and promote sustainable practices within households. We conducted semi-structured interviews with thirteen households, utilizing a combination of images and low-fidelity prototypes to gain insights into participants’ preferences, ideas and feedback on visualizing consumption information. We requested participants to discuss an object in their home that symbolizes sustainability. The results revealed different emotional responses, from empathy to repulsion, triggered by different visual representations. Our findings also identified certain physical objects and locations within the household that play a role in fostering family collaboration towards sustainable practices. Participants preferred having a physical representation of their consumption data within their homes over a screen-based display. In light of these findings, we open space to consider designing physicalizations that encourage collaboration, enhance user engagement and motivate households to reduce their consumption.

Preferences and valuation of small-scale wastewater treatment system maintenance using discrete choice method: Case of community-managed system in Jakarta, Indonesia

The focus of public service delivery on sustainability and universal access has enabled the enactment of many community-based programs in Indonesia. However, relevant studies that examine the willingness to pay among households that utilize community-managed facilities are lacking, despite it being one of the most important factors for maintenance and a strong indicator of commitment. In the present study, we aimed to estimate household users' preferences and willingness to pay (WTP) to understand their demand for related services. It estimates household user preferences and willingness to pay to understand the demand for related services through a choice experiment. By comparing all service attributes, the results highlight that users derive the highest utility if they updated reactors and pipelines, and, conversely, if the responsible authority is changed. The desire for quality improvement and service expansion were confirmed using this model. The mixed model estimated a willingness to pay of 0.03–3.13 USD for average users, depending on the attributes. Our findings confirm that families who belong to a community that operates a decentralized system derive greater benefits from improved maintenance; thus, they are willing to pay more to enjoy the service. Notably, at its core, a community-managed system, such as the Sanimas Program, is a co-production initiative between multiple levels of government institutions and local residents. Therefore, maintenance actions should involve resource- and payment-intensive efforts, such as half-year sanitary desludging and system replacement owing to deterioration and hazards. Policy regulations that correct the distribution of roles among partners for maintaining the system should be initiated. These findings provide evidence for the government's commitment to the community and could help convince other stakeholders to redirect their attention to supporting sustainable system performance.

Are people willing to share living space? Household preferences in Finland

This paper explores citizens’ interest in space sharing in private housing. It is based on a large-scale random sample citizen survey (N = 1448) conducted in Finland focusing on multiple aspects of low-carbon housing. Both quantitative preference-related results and qualitatively analysed open question responses show that the concept of shared space use is relatively low in popularity. However, there are differences depending on the space to be shared. Approximately half of the respondents are willing to use shared space for exercise, children playing and repairing activities, whereas a small fraction would use it for cooking, working and studying, or guest accommodation. Respondents’ backgrounds only slightly impact the willingness to share spaces. However, people in urban areas are more willing to share spaces. Larger floor area per inhabitant is negatively associated with the willingness to share spaces. This implies that sufficiency in housing is linked with space-sharing interests. This paper concludes that space-sharing is relatively unattractive under present conditions. Improving functionality and social trust by attractive design, clearer user rules and spreading good examples could be approaches to enhance the situation. Practice relevance Space-sharing as an operationalisation of housing sufficiency could be an attractive avenue for increasing the utilisation rate and efficiency of space use among households. Based on the results from a survey of Finnish citizens, space-sharing received somewhat mixed responses, although 75% of respondents indicated at least some willingness for sharing activities. Respondents with high climate-change awareness and those living in urban areas are associated positively with an interest in space-sharing. Future development needs to increase the attractiveness of sharing spaces include paying attention to the design of shared spaces, formulating clear user rules, creating functional booking and fee systems, and building awareness towards responsible user practices.

Assessment of household preferences for net textile type (polyester versus polyethylene) for decision-making of the National Malaria Control Programme in Burkina Faso: methods for a quasi-experimental study

BackgroundA quasi-experimental comparative trial will be designed in Burkina Faso. The study will compare the use and preferences for two groups types of insecticide-treated nets textile: polyester-based and polyethylene-based, according to their use and preferences in selected health districts. These health districts will be selected in three eco-climate zones (Sahelian, dry savannah and wet savannah) in the country. These findings will inform decisions on future net procurements for national malaria control programme in 2025.MethodsQuantitative surveys and qualitative data collection will be carried out to gather information on the type of net textile most commonly used and preferred by the community. They will be performed between the end of the dry season and the early rainy season. The quantitative surveys involved household interviews with households and individuals’ questionnaires, while the qualitative data collection involved in-depth individual interviews and focus group discussions to explore and clarify some key evaluation criteria. A total of 9450 insecticide-treated nets were surveyed for quantitative survey purposes. For the qualitative study, 48 in-depth individual interviews and 12 focus group discussions were carried out. A mixed model approach combining the results from quantitative surveys and qualitative studies will be used for decision-making on the type of insecticide-treated net preference.ConclusionThis methodological approach will be used by the National Malaria Control Programme to conduct this study on determinants of net use in Burkina Faso in order to provide robust evidence across diverse settings. This mixed-methods approach for data collection and analysis could be used in other countries to provide evidence that would help to increase the uptake of insecticide-treated nets, the main vector control tool in Africa.

Agent-based power management in apartment buildings: Tenant preferences and distributed energy resources

Apartment buildings (APBs) consist of multiple residential spaces and common facilities, unlike single-family buildings, and have correspondingly diverse energy demands; however, household preferences and behaviors have received little attention so far. Therefore, bidirectional flows between households and the APB must be considered to manage the APB energy demands by considering dynamic relationships built by households with preferences and behaviors. This study presents a demand-side management system called the unified home energy management system (U-HEMS), which considers distributed energy resources (DERs) for the APB. The U-HEMS was developed by bidirectional flows of management and decision-making processes for households and the APB. In the management process from the household to the APB, the APB power demands were optimized using a two-stage system, whereas in the decision-making process from the APB to the households, the next actions expressed by weighting factors of the household side were determined for the management process based on an agent-based model. The functionality and performance of the U-HEMS were compared with those of conventional approaches for a 100-unit APB, and five case studies were conducted to analyze their power demands considering different aspects: decision-making process, combinations of households’ preferences, reward system, penetration of electric vehicles, and DER capacities. The results reveal that the U-HEMS effectively reduces the overall costs and total peak power demand because a bidirectional model considers the dynamic relationships between households in the APB and DER operations subject to the time-varying pricing policy. Further studies are needed to assess seasonal effects on APB demands.

Household Preferences for Domestic Water Conservation Practices: A Systematic Literature Review

Household Preferences for Domestic Water Conservation Practices: A Systematic Literature Review

Replicating business cycles and asset returns with sentiment and low risk aversion

I solve for the sequences of shocks (or wedges) that allow a standard real business cycle model to exactly replicate the quarterly time paths of U.S. macroeconomic variables and asset returns since 1960. The resulting shock sequences can be grouped into three main categories: (1) shocks that affect household sentiment and preferences, (2) shocks that appear in the law of motion for capital, and (3) shocks that appear in the production function for output. For most variables including output, no single shock category is clearly dominant in explaining the observed movements in U.S. data. While some variables are driven by a single dominant shock category, the dominant category is different for each of those variables. The results imply that there is no “most important shock.” Rather, U.S. economic outcomes have been shaped by a complex and time-varying mixture of fundamental and non-fundamental disturbances.

Is the output growth rate in NIPA a welfare measure?

Abstract This paper shows that, in a dynamic general equilibrium framework, the rate of output growth as measured by national income and product accounts reflects changes in welfare in the precise sense of equivalent variation. The main argument is straightforward. In a two-sector dynamic general equilibrium model of heterogeneous households, recursive preferences and quasi-concave technology, the Bellman equation provides a representation of household preferences over current consumption and investment. When applied to this representation of preferences, a Fisher–Shell true quantity index turns out to be equal to the Divisia index, closely approximated by the Fisher ideal chain index used in national income and product accounts.

Why Don’t You Leave? A Household Bargaining Model with a Household Preference of Addiction

Why Don’t You Leave? A Household Bargaining Model with a Household Preference of Addiction

Effects of adult children's marriage on household stock market participation: An event‐study difference‐in‐differences approach using Chinese micro data

AbstractThis paper examines households' stock market participation responses to a critical life‐cycle event, adult children's marriage. An event‐study difference‐in‐differences approach is employed to facilitate identification, which compares changes in the stock market participation behaviors of households that experience children's marriage with households that experience it later as well as households that never experience it. Exploiting household‐wide variations in exposure to children's marriage using the China Family Panel Studies data over the 2010–2020 period, this paper finds that 2 years after children's marriage, households significantly enhance their likelihood of participating in the stock market. Households' willingness to participate increases by 1.1 to 1.6 percentage points depending on specifications. This paper's finding supports time‐varying risk aversion at the household level. Mechanism analysis indicates that children's marriage raises household risk preferences because it mitigates parental old‐age support concerns and alleviates households' consumption commitment to housing and children.

Do households value lower density: Theory, evidence, and implications from Washington, DC

A substantial literature demonstrates that zoning restrictions on building height or density lower supply and increase housing prices. However, negative externalities due to household preferences for lower neighborhood density could justify restrictions on private developers. Thus building density in a laissez-faire city may be above the welfare maximizing level. The potential external costs of height and density are tested here and found to be substantial. Increased building separation appears to mitigate the external cost of height. This implies that some level of density or floor regulation (FAR) may be welfare-enhancing, and that the gap between price and marginal construction cost may overstate the social cost of zoning because households value lower density. The analysis considers residential density and not employment density which can give rise to other types of externalities.

Measuring heterogeneous preferences for the preservation of prime farmland with and without agrivoltaics

This study addresses a gap in cultural ecosystem service (CES) assessment of prime farmland located in peri-urban areas by presenting results from a choice experiment recently conducted in Utah’s Wasatch Front region. The choice experiment was designed to account for heterogeneous effects associated with a wide array of socio-demographic and attitudinal characteristics on household preferences for farmland preservation, including farmland used for the joint production of solar power and agricultural products. We apply a mixed-logit model to our data that controls for preference heterogeneity among Wasatch Front households along two dimensions – at the individual household level and according to different household types. We find that the typical household is willing to pay a non-trivial annual fee to preserve the region’s existing peri-urban farmland, and to a lesser extent is willing to pay for agrivoltaics on that land. We also find some evidence of preference heterogeneity among different types of households for farmland preservation and agrivoltaics; heterogeneity based upon traditional socio-demographic characteristics such as household income and location, as well as unique attitudinal differences related to how households view themselves in relation to agriculture, farmland preservation, and the extent to which taxation is an appropriate mechanism to fund local public goods. These findings can serve as crucial components of broader land-use studies designed to account for the full range of agri-environmental ecosystem services.

It takes two to tango: Spousal risk preferences and CEO risk-taking behavior

Using hand-collected data on the cultural origins of S&P 500 CEOs and their spouses, we examine whether differences in risk attitudes within marriages influence corporate risk-taking behavior. We find that CEOs with more risk averse spouses adopt relatively safer corporate policies. The effect is stronger if the CEO comes from a more collectivist culture, has been married more recently, or shares more responsibilities with their spouse. Together, these findings suggest that the cultural composition of CEOs’ households and their spouses’ risk preference affect corporate risk-taking behavior.

Shocks and Stability of Risk and Time Preferences among Poor Rural Households in Ethiopia

Abstract This paper examines the effects of shocks on temporal stability of risk and time preferences of rural households within a developing country context characterized by frequent droughts, chronic food insecurity, and low levels of education. Leveraging a three-wave large and diverse household panel data that elicits preferences every two years for more than 6,500 individuals from over 5,600 sample rural households in Ethiopia, we analyze the effects of droughts (self-reported) and rainfall shortfalls on household risk and time preferences. Our findings show that households become more risk-averse and impatient after experiencing drought and rainfall shocks; the change in risk preferences is more notable among households that experience recurrent droughts and multiple covariate shocks during the same period.

A review of sustainable housing preferences and affordability

The review examined the potential connections between sustainable housing, and sustainable affordability of such housing while meeting the housing preferences of various households. It is widely known that many lower-income countries are facing a housing crisis, and it is crucial to address this issue by providing affordable housing that meets individual needs while also promoting environmentally friendly living. This review paper Is centered on the research question: How can sustainable housing be made more affordable and accessible to all households while meeting their housing preferences? A qualitative study of 66 publications from 2019 to September 2023 found that sustainable housing offers ecological and energy-efficient benefits, but there are barriers to scaling up these models, including economic, cultural, and legal challenges. Housing preferences are influenced by factors such as cost, location, and amenities, with affordability being a significant concern. While environmental and economic sustainability can positively impact housing prices in turn affect the affordability of such housing, the initial investment costs can be challenging for lower-middle-income households. The review further established that Sustainable housing, housing preference, and affordability are broad topics that have been explored by many researchers. However, there are still some research gaps that need to be addressed. There is a significant gap in how sustainable housing can be made affordable to all households while meeting their housing preference hence the need to explore the intersection between sustainable housing, housing preference, and affordability by carrying out empirical research to identify ways in which sustainable housing can be designed and built to meet the needs and preferences of low-income households while remaining affordable.

Households' Preferences Over Inflation and Monetary Policy Tradeoffs

We document novel facts about U.S. household preferences over inflation and monetary policy. Many households are highly attentive to news about monetary policy and to interest rates. The median household perceives the Federal Reserve's inflation target to be three percent, but would prefer it to be lower. Quantifying the tradeoff between inflation and unemployment, we find an average acceptable sacrifice ratio of 0.6, implying that households are likely to find disinflation costly. Average preferences are well represented by a non-linear loss function with near equal weights on inflation and unemployment. These preferences also exhibit sizable demographic heterogeneity.

Income inequality of tribal households in Bangladesh: A decomposition analysis

This paper uses field survey data to examine farm and non-farm income to reduce income inequality among tribal households in Sylhet district, Bangladesh. It uses a decomposition method and a regression-based decomposition method to measure income and expenditure inequality by source of income as well as by household and family characteristics. For this, non-farm income was considered as an external transfer of total income to decompose the Gini index and as a potential substitute for farm income, taking into account household preferences. The results indicate that income differences exist between farm and non-farm income, thereby increasing income inequality. The endowment effect on household characteristics was positive and significant, directly supporting the increase in non-farm income per capita daily household expenditure. On the other hand, in terms of its components, non-farm self-employment income reduces income inequality, while non-farm wage income increases income inequality. At the 50th quantile results, an additional year of age of the household head increases the per capita expenditure of farm and non-farm households by BDT 300 to BDT 400, respectively. Moreover, the education of household heads also positively and significantly affects the per capita expenditure of non-farm households. As estimated by the 50th quantile, farm and non-farm households with graduation had higher per capita daily expenditure than household heads with primary education. Raising household education level and total farm household income to a better level, adopting farm-income enhancement programs, and enacting policies to increase alternative income opportunities that will shift income from non-agricultural to agricultural tribal households, reduce income inequality, and bring about the well-being of tribal society.

Analysis of preferences of households for choosing heating and cooling systems: A discrete choice analysis in Iran

The residential sector uses a large fraction of energy for heating and cooling to provide comfort conditions for households. Technical features of appliances are determining factors of the demand for energy. The present paper thus aims to study the determinants of household adoption decision by applying the discrete choice model. Households face with unordered choice, and multinomial and mixed logit models are employed to study the heterogeneity of choices of households related to heating and cooling technologies. While most of the research works have considered preferences based on cross-sectional data collected through discrete choice experiments, the present study employs micro-level household survey data including observed preferences in order to contribute to better understanding of the actual choice behavior of households. In addition, the dynamic effect of variation of variables on the household preferences have been investigated over time. The results show that heterogenous preferences of families in choosing appliances are affected by socio-demographic characteristics. Analysis of marginal effects indicate that urbanization, education, building type and households expenditure are the most effective parameters. The level of education has the most positive impact on the adoption of wall-mounted package and split air conditioner where the probability of using them has increased by 1.65% and 4.87%, respectively. On the other hand, high education level reduces the probability of gas heater and fan adoption by 3.49% and 3.43%. The estimated results show that urbanization increases the probability of choosing central heating by 3.73% and split air conditioner by 6.1% while it decreases the adoption probability of oil heater by 5.02% and fan as by 8.9%.

Hurricane-Induced Power Disruptions: Household Preferences for Improving Infrastructure Resilience

Hurricane-Induced Power Disruptions: Household Preferences for Improving Infrastructure Resilience